TSB Boss Steps Down After IT Failure

TSB’s chief executive Paul Pester has stepped down after a disastrous IT failure engulfed the bank in April this year.

Pester was in charge of TSB for seven years, but is now leaving the bank and has been replaced with “immediate effect” by Richard Meddings, who was previously the non executive chairman of TSB.

Pester’s departure will no doubt please MPs on the Treasury select committee, but some may feel that Pester took the blame for TSB’s Spanish owner Banco de Sabadell, and its chaotic data migration process.

Pester resignation

Pester however will leave with a payout of at least £1.68m – including £1.2m for his notice period and a £480,000 payment agreed before TSB was taken over by Sabadell in 2015.

“Whilst there is still work to do to achieve full stability for customers, TSB’s systems and services are much improved since the bank’s IT migration earlier this year,” said the bank. “Paul and the Board have therefore agreed that this is the right time for Paul to step down and to appoint a new CEO for TSB.”

“The last few months have been challenging for everyone at TSB,” said Pester. “However, I want to thank all my colleagues across TSB for their dedication and commitment during this period and for their focus on putting things right for TSB customers.”

“Paul has made an enormous contribution to TSB,” said his replacement Richard Meddings. “Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration.”

“Paul and the Board have therefore agreed that this is the right time to appoint a new CEO for TSB,” said Meddings. “Our goal is therefore to allow a full search to commence, without any distractions, enabling TSB to build for the future.”

IT fiasco

The problems began when TSB moved its five million customers and their 1.3 billion records from a banking platform it was renting from former owner (Lloyds Banking Group) to its new ‘state-of-the-art’ platform developed by its Spanish-owner Sabadell.

But things rapidly went wrong and TSB customers who managed to get access to their online accounts, were often presented with details of other people’s accounts.

Other TSB customers were unable to log on, others had passwords problems, and some saw other people’s funds transferred into their own bank accounts.

Spanish blame?

The insider previously told the Guardian newspaper that Sabadell had a disturbing lack of appreciation of the complexity of the migration.

Indeed Sabadell was apparently warned in 2015 that its ambitious plan was high risk, but Sabadell pressed ahead anyway.

And at least one expert warned that any data migration process shouldn’t be underestimated.

“The news that TSB boss Paul Pester has stepped down in the wake of its major data migration failure should throw into sharp contrast why data migration shouldn’t be underestimated,” explained Owen Pettiford, SVP of SAP Digital Transformation and SAP Mentor at BackOffice Associates.

“Undertaking the migration of 5.2 million accounts is no mean feat and sadly, this error could have been avoided,” said Pettiford. “Unfortunately, TSB isn’t alone in this. Few companies understand the critical relationship between a successful data migration and a successful go-live. It’s not just about data and a database.”

“All too often data migration is misunderstood, underfunded, inappropriately resourced and poorly scoped,” said Pettiford. “As TSB has shown, there are costly financial and reputational consequences if businesses don’t forensically plan each stage of a migration.”